Huntsville City Schools closed Terry Heights Elementary in May 2009 and put the 17-acre campus up for sale. Children from the neighborhood now attend University Place Elementary. (Steve Doyle | sdoyle@al.com)

HUNTSVILLE, Alabama - The Huntsville Housing Authority may have to scrap a proposal to build new public housing in the Terry Heights neighborhood.

At a meeting last week, the Huntsville Board of Education gave Superintendent Casey Wardynski permission to subdivide the vacant Terry Heights Elementary campus on Barbara Drive.

School board President Laurie McCaulley said part of the 17 acres may be sold for residential development, but the remainder will be used for a future elementary school.

McCaulley said officials need to start planning now to replace University Place Elementary. UAH has agreed to buy the 30-acre campus for $4.7 million but has until Oct. 1, 2018, to take possession.

Terry Heights is the most logical spot for a replacement school, said McCaulley, because a large percentage of University Place students already live in the neighborhood west of downtown.

"When the school system closed Terry Heights (in 2009) and consolidated it with University Place, we gave a pledge to that community that they would get a new school," McCaulley said Wednesday. "I want to keep our promises."

Backed by the findings of a real estate consultant, Lundy said the Terry Heights property would be ideal for a small residential development with a mix of public and affordable private housing. Sparkman Homes on busy Holmes Avenue was better-suited for a future elementary school serving the neighborhoods due west of downtown, he said.

Huntsville Housing Authority officials want to redevelop Sparkman Homes on Holmes Avenue as part of an ongoing initiative to deconcentrate poverty in the city. (Huntsville Times file photo)

During a Dec. 20 housing authority meeting, Lundy reported that Wardynski was "very positive and thought (Sparkman Homes) would be a good location" for an elementary school.

But McCaulley said the superintendent has concerns about the Norfolk-Southern railroad tracks that border Sparkman Homes.

If the school system chooses to rebuild at Terry Heights, "it does change our redevelopment strategy for Sparkman Homes," Lundy said this week. "We'd just have to go back to the drawing board."

In December, the U.S. Department of Housing and Urban Development rejected the agency's application for a $350,000 Choice Neighborhoods planning grant for Sparkman Homes. And while Lundy has talked about aggressively pursuing a $30 million implementation grant needed to rebuild Sparkman Homes, he conceded it may now be an uphill climb.

Lack of major partners such as the city school system would "reduce the competitiveness" of the agency's HUD grant application, Lundy said Tuesday.

Sparkman Homes opened in 1954. Its 439 residents have an average yearly income of $5,531 -- lowest among the city's public housing developments.